PROJECT

DRIVING THE LOYALTY SALES PERCENTAGE OF

RELIANCE FRESH STORE, VAISHALI NAGAR,JAIPUR..

Submitted To:

Centurion Institute Of Professional Studies, Pratap Nagar, Jaipur.

(In partial fulfillment for the requirement of degree of P.G.D.M.) (Two year full time Programme)

SUBMITTED BY: Under the supervision of BHOMA RAM Dr. Raghuveer singhPGDM 2nd Semester (Director CIPS. )

BATCH

1

2007-2009

PREFACE

For a management student theoretical knowledge as well as

practically orientation exposes oneself to experiences, one can again

be mastering it is best possible time. PGDM curriculum has been

fine-tuned in such a way that a student not applies the theoretical

knowledge but also gain it in a practical sense. Thus objective can be

attained through application of theory tools concepts and techniques

of Management.

The Project Starts With Introduction about –

Chapter -1 includes Introduction

Chapter-2 includes Introduction to the company

Chapter -3 includes understanding planogram

Chapter-4 includes research methodology

Chapter-5 includes data analysis and findings

Chapter-6 includes conclusions and suggestions

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ACKNOWLEDGEMENT

There is always a sense of gratitude which one express to other for the

helpful so needy services they render during all phases of life. I would like to

express my gratitude towards all those who have been helpful to me in getting

this mighty task of training to a successful end.

First of all, I consider it a pleasant duty to express my heart felt

appreciation, gratitude and indebtedness to Sir RAGHUVEER SINGH for there

keen interest, invaluable pains taking & excellent guidance, patience, endurance,

encouragement & thoughtful advice for the project work.

I would take this opportunity to thank all my family members for their helps

& suggestions during the course of project work. I am also thankful to all my

friends who gave me constant & continuous inspiration to complete this project.

(BHOMA RAM)

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EXECUTIVE SUMMARY

The project studies were conducted at Reliance Fresh

convenience store of Reliance Retail situated at Vaishali

Nagar, Jaipur.

The Summary of the project is as follows:

Project title is “DRIVING THE LOYALTY SALES

PERCENTAGE OF RELIANCE FRESH STORE, VAISHALI

NAGAR,JAIPUR.

Research methodology is –

Sampling plan :-

Non Probability (convenience)

Research design :-

Exploratory research.

Data collection method :-

Interrogation through personal interview.

Objectives of the study :-

To study & Increase the “Loyalty Sales Percentage” (in consultation with

Franchisee Manager, Franchisee Development Manager (F.D.M.)).

Better utilization of available resources.

To increasing Loyalty Sales Percentage.

Aware customer about RealianceOne Membership card.

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To increase store profit and methods to reduce costs.

Identify methods to study and evaluate the stock movement of Non Food Fast

Moving Consumer Goods (NF-FMCG) & high value SKUs esp. large chocolates

and house wares and suggest appropriate low value NF-FMCG product mix.

To study the effective utilization of Planogram of the store.

Limitation of the study: -

The study was restricted to theoretical ground only so it was difficult to draw the true

interpretations of the study.

The conclusion arrived at are based on vary less experience of researcher in this field.

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  TABLE OF CONTENTS  CHAPTER

CONTENTSPAGE NO.

1 INTRODUCTION 7-28

1.1 PROJECT INTRODUCTION 11-18

1.2 RETAIL IN DETAIL 18-20

1.3 RETAIL TERMINOLOGY 20-23

1.4 RETAIL SECTOR IN INDIA 23-26

1.5 RETAILING FORMATS IN INDIA 26-28

2 INTRODUCTION TO THE COMPANY 29-62

2.1 RELIANCE GROUP 29-49

2.2 RELIANCE FRESH LOYALTY PROGRAMME 50-56

2.3 RELIANCEONE MEMBERSHIP CARD 57-62

3 UNDERSTANDING PLANOGRAM 63-66

4 RESEARCH METHODOLOGY 67-74

5 DATA ANALYSIS AND FINDINGS 75-84

6 CONCLUSIONS AND SUGGESTIONS 85-86

ANNEXURES 87-88

BIBLIOGRAPHY 89

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CHAPTER- 1 INTRODUCTION

Evolution of Retail

Retail, according to Concise Oxford English Dictionary, is

“the sale of goods to the public for use or consumption

rather than for resale”.

The barter system was first known retail form; then the

currency changed hands; we had the handcart vendor

selling goods in the streets; of late we have a pop & mom

stores which compliment the neighborhoods stores.

The first retailer in India includes Bata, Pantaloon, Bombay

Dyeing, Spencers, and Nilgiris & Higginbotham. The

current retail scenario is controlled by the likes of

Shoppers’ Stop, Brand Outlets, Big Bazaars etc.

The top 4 world players include Wal-Mart, Carrefour, Tesco

and Metro.

The opportunities as mentioned are aplenty with close to

15000000 sq.feet of retail space is under construction for

various malls & shopping centers across the country.

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Retailing consists of the sale of goods or merchandise,

from a fixed location such as a department store or kiosk, in

small or individual lots for direct consumption by the

purchaser. Retailing may include subordinated services,

such as delivery. Purchasers may be individuals or

businesses. In commerce, a retailer buys goods or products

in large quantities from manufacturers or importers, either

directly or through a wholesaler, and then sells smaller

quantities to the end-user. Retail establishments are often

called shops or stores. Retailers are at the end of the supply

chain. Manufacturing marketers see the process of retailing

as a necessary part of their overall distribution strategy.

What is Retailing

The sale of goods or commodities in small quantities

directly to consumers.

Buy, Sell & Move

Buy, Move & Sell

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Having gone through some of the terminologies in retail and

having seen a broad outline of retail now let’s look into the

3 basic things, which govern the retail market.

1. Buy

Buying would involve the following activities, which would

mean setting the guiding principles for all the merchandise

decisions that a retailer makes. It should reflect target

market desires, retailer’s institutional type, market place

positioning, defined value chain, supplier capabilities, costs,

competitors & product trends.

2. Move

It can be easily said but the processes that are involved in

the “move” part are complex but simple. From the product

stage through the processing stage to the packed ones the

move stage would continue.

Various levels that involves in “move” part are:

The buyer shortlists the product, places the order.

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The vendors receives the order, process the same, packs

and send it to the distribution center from where it reaches

the store for the customer to buy.

One of the fast picking up aspects of the logistic in India is

the COLD CHAIN. More and more organizations are looking

for various aspects of cold chain to ensure that the products

where temperature plays a vital role is maintained and

sustained till such time the sale happens.

The Merchandising and Category management is another

important function of the retail industry. In this we have to

opt for right product, place, quantity, quality, mix, price and

time. Each of the stores would operate on certain basic

business projection and all others will follow a typical

pattern. For this pattern to be arrived, the merchandise

management plays a big role. The merchandise can make or

break an organization of its profitability.

When we say category management, it would amply the

assortments of products the customer sees as reasonable

substitutes for each other with similar characteristics. It

also covers the process of managing merchandise in a retail

business with the objective of maximizing sales and profits

of a category. The category manager is also responsible for

developing assortment plans for the entire category, buying

pricing and coordinating promotions.

3. Sell

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Finally of the Buy, Move & Sell comes the selling part of it

which involves a running of a retail stores. Operations as it

is known are the crucial functions, which derive its strength

from various other faculties.

The beginning of the day is done with the store being

opened by the competent person. The first activity to

happen will be the housekeeping activities followed by the

staff scheduling. The morning’s meetings happen chaired by

the head of the store. The stock outs are established and the

replenishments happen as the day progresses, though it is

suggested that replenishments of the stock should always

happen when the customer is not there. The head of the

store usually inspects any one or all the departments of the

store, which is otherwise called the “FLOOR WALK”.

The cashier would ensure that all the cashiers have enough

and correct float cash, whether the POS role, card swap

machine and pen is in place or not. In starting of the day

head cashier gives all cashiers a sum of Rs.1500 as loan.

Having set everything in place, the store would then be

opened for the customers.

The department’s heads in turn would brief their team on

the achievements of the previous day and set target of the

day. During this brief any incidents worth mention would

also be discussed and the promotion offers, which are

current, will also be taken up. Orders will be placed for all

the stock out SKU follows up will also be done for those

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articles, which are delivered during the day. Cleaning of the

self and also ensuring that the stocks are kept as per the

planogram are checked. It’s just not the duties mentioned

above but selling also happen simultaneously.

At the end of day the process of concluding the activities is

called the “END OF THE DAY” activities. As the person who

is in charge of closing the store goes around checking

whether the locks are in place or not; the high value

merchandise counters are properly secured; check for any

person hidden in the change rooms or cloaks rooms; the

cashier would ensure that all the money that has been given

as float tallies apart from the money that need to be

submitted by the respective cashiers. There will be a

checklist that needs to sign off together by the security as

well as the in charge for having checked for conformity at

the end of the day.

1.1 - PROJECT INTRODUCTION

The project was done at Reliance Fresh convenience store

of Reliance Retail situated at Vaishali nagar.

This project is all about to increase the Loyalty Sales

Percentage of the individual stores.

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What is Loyalty?

The degree to which customers are predisposed to stay with

one company and resist competitive offers.

Building Customer Loyalty

1. SERVICE NETWORK:The mantra for marketing professionals is

service, service and more service! That’s right! One of the best ways

of ensuring your customers keep coming back to you is providing

impeccable service. This includes everything from service at the point

of sale to after-sales service, which builds a lasting relationship with

the customer. Most manufacturers of white goods understand

relationship marketing like no one else. The peculiarity lies in the

product itself, where it might need to be serviced long after it is

bought. Moreover, the purchase might have taken place somewhere

different from where the service is required. Companies like Eureka

Forbes and Whirlpool pride themselves on superb customer service

satisfaction levels. They manufacture a wide range of durables which

can be serviced at various locations throughout the country.

Remember, the customer is smart. He will judge your company even

on small things like whether the salesperson reached in time. If he is

late, the customer will never trust any claims of “zero error” quality

made by you. So, watch out for service, the buzzword of the industry.

2. QUALITY CONTROL:“You never get a second chance to

make a first impression” was the tagline for ‘Head and

Shoulders’ shampoo years ago. Impeccable service too

cannot save you if you do not deliver a good quality product

each and every time. This is true especially for restaurants,

where the food served has to be of the same quality time

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and again to keep customers coming back to you. Here,

quality is conveyed via word-of-mouth. One bad experience

is enough to ruin the impression forever.

Another good way of assuring customers value the quality of

your product is to get an outside agency or someone else to

endorse the results. For instance, Colgate Toothpaste

continually reminds the customer that it is endorsed by IDA,

the Indian Dental Association and it is the brand trusted by

most dentists. HLL gets customers to talk about their

“Pond’s Age Miracle” range of cosmetics and Dove soaps in

their television ads, to endorse the quality of their products.

That is also the psyche behind prompting a customer to try

out the product. If a Vim Bar is a good dishwashing bar for

Mrs X, a housewife, it has to be good for you too! If others

say that your product is good, it’s gotta be good!

3. CONSTANT INNOVATION:“Once a customer, always a

customer”, is no longer true in these days of fluctuating

brand usage. Customers now have more choices than before

and are more willing to try out new brands. This fickle-

minded buying warrants a constant focus on the changing

mindset of the customer. The brand too has to change with

customer tastes. Nestle India does it best with its brand of

Maggi food products. They now have variants for their

instant noodles like ‘Dal Atta Noodles’ and ‘Rice Noodle

Mania’. Their competitors in the food segment, HLL

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(Hindustan Lever Limited, now called Hindustan Unilever

Limited) tickled the Indian palate by making multiple

variants of the traditional Tomato Ketchup in flavors like

mint, tamarind and chilli. Amul, which has a strong

presence in the ice-cream segment, sensed the need to keep

the health-conscious customer in its kitty by adding the new

Probiotic range of sugar free ice-creams! Kellogg’s Chocos

are now available in a new flavour – Chocos Toffee to keep

the children happy and dedicated! Innovation is the name of

the game and timing is everything!

4. DIVERSIFICATION INTO SIMILAR PRODUCT LINES:If a

customer feels that Dove Soap is the best for her skin, why

not make her think the same way about shampoos as well?

That’s exactly why the brand name has now been extended

to shampoos in the Indian market. Stretch the loyalty and

benefits associated with a brand to include other similar

products.

Lotus Herbals, for instance, makes chemical-free skincare

products like creams, lotions and sunscreens. It has a

strong base of happy customers because of its USP - ‘herbal

ingredients’. Now, it has also launched its ‘herbal’ range of

cosmetics on the shelves. So the same customers have a

choice of using herbal preparations for their lipsticks and

eye shadows as well. Chances are, they will be only too

eager to try them out! Even when it comes to food products,

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brand loyalties can be stretched further. Knorr Soups,

manufactured by HLL, extended their “instant soup

powder” mixes to include “instant make-a-meal” powders

for Chinese recipes. They now offer instant Chinese

Manchurian, Hot & Sour, Chilli and other preparations for a

quick meal at home. Amul too capitalized on its distribution

network to deliver different products to its customers. They

started from milk and now provide butter, ghee, cheese and

even ice-creams.

5. STRONG DISTRIBUTION CHAINS:If I want to buy a

product, it must simply be available. For fast moving

consumer items, it means availability at the nearest grocer.

From personal experience, I can tell you how important this

is. I like Nestle’s Munch chocolate a lot, but many a time I

end up coming home with a Cadbury’s Perk in hand, due to

unavailability of the other brand. Perk tastes just as good,

and pretty soon I ended up asking for Perk at the local

grocery shop instead of Munch. This shows how just

availability or lack of it can affect the customer’s brand

choices forever. For a long period Amul faced a similar

problem with its products. Originating from Gujarat, the

availability of its products was restricted to the home state

and a few neighboring ones. Consciously, after a lot of effort

Amul successfully expanded its distribution chains

throughout the country. An effective media campaign

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helped pass this advantage on to the customers. If you want

people to keep buying your brands, make sure the grocery

store around the corner stocks it.

6. REINFORCE THE DECISION:Lastly, after people have

tried your product, tell them that they have made the right

decision. What better example to give you than the Pepsi ad

which said, “Yehi hee hai right choice baby, aha!” You will

have customers hanging on to you forever. The human mind

looks for signals to reinforce the decision made by it, to tell

itself that yes, you were correct! It’s no wonder then that

the L’Oreal ad shows Aishwarya Rai spouting the phrase

“Because you’re worth it!

Customer loyalty towards your brand can give you the

advantage of decreased cost of advertising. You can also

increase the price of your brand to capitalize on the same.

So, go ahead and take the plunge into the world of brand

loyalty!

Benefits

•Customer loyalty towards your brand can give you the

advantage of decreased cost of advertising.

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•You can also increase the price of your brand to capitalize

on the same.

Loyalty Sales % = Sales through the Loyalty Card X 100

Total Sales

Customer Loyalty programs need to stay fresh, be easy to

administer, and tightly integrate with the central price file

and all the customer touch points. Successful Loyalty

programs pinpoint value to a specific group of consumers.

The continuous change in programs keeps consumers

engaged and avoids the attitude of entitlement.

The Retalix customer loyalty application suite, however, is

not your run-of-the-mill solution. It is comprehensive, easy

to administer, and effective.

Retalix Loyalty is a real time, online, centralized system that

manages the Loyalty and Promotional marketing campaigns

for Grocery and Convenience Store Retailers.

Coupled with the Retalix 1-to-1 Targeted Marketing

Analysis tool, a retailer can easily reward customers

according to their specific taste and loyalty level via a

multitude of reward programs to keep it fresh and fun.

Moreover, through a tight integration with the Pricebook,

POS and Fuel Pumps, electronic rewards can be fulfilled for

the consumer right at their purchase location.

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Retalix Loyalty includes:

Integrated POS and Pump interface to collect data,

print Loyalty program information on the receipt,

display messages to the cashier and customer,

discount items, and redeem e-gift certificates, tender

credits, and loyalty points

Net-based online communications architecture

Multiple set of basic programs (Charity, Continuity,

Sweepstakes, e-Coupons, Points)

Tiered pricing rewards (electronic discounts) including

fuel, according to loyalty levels

Reports to measure loyalty not only by gross spending

but also by gross profit

Reports to measure program participation by store and

chain

Net-based Centralized Management System

Retalix 1-to-1, Targeted Marketing Why the card is

not being used?Customer forget their card.

Customer don’t know the benefits of card.

Quality of temporary card is very poor.

Cashier forget to ask about the card.

Many unwanted details are to be filled in form by customer.1.2

- RETAIL IN DETAILThe Indian Retail market is worth a

whooping 930000 crores. If one has to divide between the

organized and unorganized sectors the major contribution

comes from the unorganized sector, which contributes close

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to 98% of the total retail market. The balance of 2%

amounts anywhere between 18-2000 crores.The difference

between organized and unorganized sectors in the US &

some of the Far East Asian countries are pretty low unlike

in India. With the advent of seasoned players in the field of

retail in India, the gap is likely to be abridged in the coming

years.The difference between them is 85:15 in favor of

organized sector in the US and 81:19 in the favor of the

organized sector in Taiwan.The employment opportunities

in retail is pretty high. But again the ratio of organized and

unorganized is skewed towards the unorganized sector.

While the organized retail sectors deploys 500000 people &

the unorganized sector deploys close to 80 times the

workforce.Factors that influence the growth in retailThe

DINK/HINK families, working women, working parents and

the rising disposable income has contributed to the growth

of Retail across. The middle-income group is the fastest

growing segment in the country today. Further the

electronic media is also aiding the growth of the Retail

industry.To summarize the top 6 factors that drive the

growth of the retail industry in India would be as

follows:The Demographics

Lifestyles

Needs and Desires

Shopping Attitudes and Behavior

Retailers action

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Environmental Factors

These six factors clubbed with a co-coordinated logistics

make the sale happen. As in any industry there is a social

commitment also to be fulfilled. These can be recapitulated

as under:

Quality products

Competitive prices

Wide range to choose from

Employment opportunities that are created

The economy would experience sea of change and

Would mean a WIN WIN situation to everyone

Support Functions:

The entire operation is possible with the help of a support

team. This support team consists of the following:

Human Relation-Involves itself in recruitment, training and

welfare apart from their

regular activities

Good Receiving-This department is responsible not just for

the receipt of goods but also checking for their conformity

and returns goods to the suppliers as need arises.

Maintenance-The entire stores furniture and fixtures are

taken care of by the maintenance team

Accounts-the department, which receives all the cash,

charge slips and other types of tenders; keeps a tag on the

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local store expenditure and also monitors any deviation in

the transactions.

Housekeeping- Mostly it’s an outsourced agency, which

does the work. They keep the premises clean and tidy at all

levels.

Security-They are responsible for safeguarding men and

material of the organization.

VM-This department maintains the displays and the signage

across the stores.

CSD-Otherwise known as the customer service desk takes

care of the customer complaints and issuance of

merchandise credit and taking care of the loyalty

programmed.

IT-The IT department takes care of all the Networking, data

maintenance and upkeep of all the tills.

1.3 RETAIL TERMINOLOGIES

Alike any other industry the retail industry also has a wide

range of terminologies, which are in use on a day-to-day

basis. Few samples of them would include the following:

Till - The cash point

Tender - The type of payment the customer is making

SKU - Stock keeping unit

Merchandise Credit - Credit note

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Assortment - Range of products and so forth

Maximum Bay Quantity - It is the maximum quantity of each

product, which can be placed on each shelf.

Maximum Display Quantity – It is the number of SKUs,

which can be directly seen by the customer in the front side.

Retail types

There are three major types of retailing. The first is the

market, a physical location where buyers and sellers

converge. Usually this is done on town squares, sidewalks

or designated streets and may involve the construction of

temporary structures (market stalls). The second form is

shop or store trading. Some shops use counter-service,

where goods are out of reach of buyers, and must be

obtained from the seller. This type of retail is common for

small expensive itms (e.g. jewelry) and controlled items like

medicine and liquor. Self-service, where goods may be

handled and examined prior to purchase, has become more

common since the Twentieth Century. A third form of retail

is virtual retail, where products are ordered via mail,

telephone or online without having been examined

physically but instead in a catalog, on television or on a

website. Sometimes this kind of retailing replicates existing

retail types such as online shops or virtual marketplaces

such as eBay or Amazon.

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Retail pricing

The pricing technique used by most retailers is cost-plus

pricing. This involves adding a markup amount (or

percentage) to the retailers cost. Another common

technique is suggested retail pricing. This simply involves

charging the amount suggested by the manufacturer and

usually printed on the product by the manufacturer.

In Western countries, retail prices are often so-called

psychological prices or odd prices: a little less than a round

number, e.g. $6.95. In Chinese societies, prices are

generally either a round number or sometimes a lucky

number. This creates price points.

Often prices are fixed and displayed on signs or labels.

Alternatively, there can be price discrimination for a variety

of reasons. The retailer charges higher prices to some

customers and lower prices to others. For example, a

customer may have to pay more if the seller determines that

he or she is willing to. The retailer may conclude this due to

the customer's wealth, carelessness, lack of knowledge, or

eagerness to buy. Price discrimination can lead to a

bargaining situation often called haggling — a negotiation

about the price. Economists see this as determining how the

transaction's total surplus will be divided into consumer and

producer surplus. Neither party has a clear advantage,

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because the threat of no sale exists, whence the surplus

vanishes for both.

Retailers who are overstocked, or need to raise cash to

renew stocks may resort to "Sales", where prices are

"marked down", often by advertised percentages - "50% off"

for example."Sales" are often held at fixed times of the year,

for example January sales, or end-of-season sales, or Blue

Cross Sale.

Top Retailer Worldwide

Rank Retailer Home Country

1 Wal-Mart Stores, Inc. U.S.A.

2 Carrefour Group France

3 The Kroger Co. U.S.A.

4 The Home Depot, Inc. U.S.A.

5 Metro Germany

(Source: Stores/Deloitte Touche Tomahatsu)

1.4 RETAIL SECTOR IN INDIA

As the corporate – the Piramals, the Tatas, the Rahejas, ITC

Ltd, S.Kumar’s, RPG Enterprises, Shopper’s Stop,

Pantaloons, Reliance Retail, Vishal Mega Mart, Aditya Birla

Group, Subhiksha, Landmark Group, True Mart race to

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revolutionize the retailing sector, retail as an industry in

India is coming alive.

Across the country, retail sales in real termss are predicted

to rise more rapidly than consumer expenditure during

2003-08. The forecast growth in real retail sales during

2003- 2008 is 8.3% per year, compared with 7.1% for

consumer expenditure. Modernization of the Indian retail

sector will be reflected in rapid growth in sales of

supermarkets, departmental stores and hyper marts. Sales

from these large-format stores are to expand at growth

rates ranging from 24% to 49% per year during 2003-2008,

according to a latest report by Euro monitor International, a

leading provider of global consumer-market intelligence.

A. T. Kearney Inc. places India 6th on a global retail

development index. The country has the highest per capita

outlets in the world - 5.5 outlets per 1000 population.

Around 7% of the population in India is engaged in retailing,

as compared to 20% in the USA.

The factors responsible for the development of the

retail sector in India can be broadly summarized as

follows:

Rising incomes and improvements in infrastructure are

enlarging consumer markets and accelerating the

convergence of consumer tastes.

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Looking at income classification, the National Council

of Applied Economic Research (NCAER) classified

approximately 50% of the Indian population as low

income in 1994-95; this has declined to 17.8% in 2006-

07.

Liberalization of the Indian economy which has led to

the opening up of the market for consumer goods has

helped the MNC brands like Kellogg, Unilever, Nestle,

etc. to make significant inroads into the vast consumer

market by offering a wide range of choices to the

Indian consumers.

Shift in consumer demand to foreign brands like

McDonalds, Sony, Panasonic, etc.

The internet revolution is making the Indian consumer more

accessible to the growing influences of domestic and foreign

retail chains. Reach of satellite T.V. channels is helping in

creating awareness about global products for local markets.

About 47% of India’s population is under the age of 25; and

this will increase to 55% by 2015. This young population,

which is technology-savvy, watch more than 50 TV satellite

channels, and display the highest propensity to spend, will

immensely contribute to the growth of the retail sector in

the country. As India continues to get strongly integrated

with the world economy riding the waves of globalization,

the retail sector is bound to take big leaps in the years to

come.

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The Indian retail sector is estimated to have a market size

of about $ 180 billion; but the organized sector represents

only 3% share of this market. Most of the organized

retailing in the country has just started recently, and has

been concentrated mainly in the metro cities.

India is the last large Asian economy to liberalize its retail

sector. In Thailand, more than 40% of all consumer goods

are sold through the super markets and departmental

stores. A similar phenomenon has swept through all other

Asian countries. Organized retailing in India has a huge

scope because of the vast market and the growing

consciousness of the consumer about product quality and

services.

A study conducted by Fitch, expects the organized retail

industry to continue to grow rapidly, especially through

increased levels of penetration in larger towns and metros

and also as it begins to spread to smaller cities and B class

towns. Fuelling this growth is the growth in development of

the retail-specific properties and malls. According to the

estimates available with Fitch, close to 25mn sq. ft. of retail

space is being developed and will be available for

occupation over the next 36-48 months. Fitch expects

organized retail to capture 15%-20% market share by 2010.

A McKinsey report on India says organized retailing would

increase the efficiency and productivity of entire gamut of

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economic activities, and would help in achieving higher GDP

growth. At 6%, the share of employment of retail in India is

low, even when compared to Brazil (14%), and Poland

(12%).

Total Private Consumption Expenditure in India – 375

Billion USD

Retail Sale – 205 Billion USD

Organized Retail – 6.2 Billion USD (3%)

Retailing – 35% of GDP

1.5 RETAILING FORMATS IN INDIA

Malls:The largest form of organized retailing today.

Located mainly in metro cities, in proximity to urban

outskirts. Ranges from 60,000 sq ft to 7,00,000 sq ft and

above. They lend an ideal shopping experience with an

amalgamation of product, service and entertainment, all

under a common roof.Examples include Shoppers Stop,

Piramyd, Pantaloon.

Specialty Stores:Chains such as the Bangalore based Kids

Kemp, the Mumbai books retailer Crossword, RPG's Music

World and the Times Group's music chain Planet M, are

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focusing on specific market segments and have established

themselves strongly in their sectors.

Discount Stores:As the name suggests, discount stores or

factory outlets, offer discounts on the MRP through selling

in bulk reaching economies of scale or excess stock left over

at the season. The product category can range from a

variety of perishable/ non perishable goods.

Department Stores:Large stores ranging from 20000-

50000 sq. ft, catering to a variety of consumer needs.

Further classified into localized departments such as

clothing, toys, home, groceries, etc.

Department Stores: Departmental Stores are expected

to take over the apparel business from exclusive brand

showrooms. Among these, the biggest success is K Raheja's

Shoppers Stop, which started in Mumbai and now has more

than seven large stores (over 30,000 sq. ft) across India and

even has its own in store brand for clothes called Stop!.

Hypermarts/Supermarkets:Large self service outlets,

catering to varied shopper needs are termed as

Supermarkets. These are located in or near residential high

streets. These stores today contribute to 30% of all food &

30

grocery organized retail sales. Super Markets can further

be classified in to mini supermarkets typically 1,000 sq ft to

2,000 sq ft and large supermarkets ranging from of 3,500 sq

ft to 5,000 sq ft. having a strong focus on food & grocery

and personal sales.

Convenience Stores:These are relatively small stores 400-

2,000 sq. feet located near residential areas. They stock a

limited range of high-turnover convenience products and

are usually open for extended periods during the day, seven

days a week. Prices are slightly higher due to the

convenience premium.

MBO’s:Multi Brand outlets, also known as Category Killers,

offer several brands across a single product category. These

usually do well in busy market places and Metros.

31

CHAPTER-2 INTRODUCTION TO THE

COMPANY

2.1 reliance group

Founder Chairman of Reliance Group

"Growth has no limit at Reliance. I keep revising my

vision.Only when you can dream it, you can do it."

Dhirubhai H. Ambani

Founder Chairman Reliance Group

December 28, 1932 - July 6, 2002

Shri Dhirubhai Ambani was an exceptional human being

and an outstanding leader. He dared to dream on a scale

32

unimaginable before in Indian industry. His life and

achievements prove that backed by confidence, courage and

conviction, man can achieve the impossible. From a humble

beginning, he went on to create an enviable business

empire within a span of just 25 years. The US$ 54 billion

Reliance Group is a living testimony to his indomitable will,

single-minded dedication and an unrelenting commitment to

his goals.

The Group's track record of consistent growth is

unparalleled in Indian industry and perhaps internationally

too. Today, the Group's turnover represents nearly 3

percent of India's GDP.

The corporate philosophy he followed was short, simple

and succinct - "Think big. Think differently. Think fast.

Think ahead. Aim for the best". He inspired the Reliance

team to do better than the best - not only in India but in the

world. He was probably the first Indian businessman to

recognize the strategic significance of investors and

discover the vast untapped potential of the capital markets

and channelise it for the growth and development of

industry. He was supremely confident that finance would

never be a constraint in executing his projects because, as

he said proudly, Indian investors would provide him with

the necessary resources. For him, his people were his most

important asset.

33

He scouted around for the best and most talented

professionals, nurtured them and continuously propelled

them to aim for still higher goals. These highly motivated

people comprise the core of what he named: "The Reliance

Family".

Shri Dhirubhai Ambani visualized the growth of Reliance as

an integral part of his grand vision for India. He was

convinced that India could become an economic superpower

within a short period of time and wanted Reliance to play an

important role in realizing this goal.

The Bhagavad Gita states, "The actions of a great man are

an inspiration for others. Whatever he does, becomes a

standard for others to follow." This certainly applies to Shri

Dhirubhai Ambani.

The Reliance Group is India's largest private sector

enterprise, with businesses in the energy and materials

value chain. Group's annual revenues are in excess of USD

22 billion. The flagship company, Reliance Industries

Limited, is a Fortune Global 500 company and is the largest

private sector company in India.

Backward vertical integration has been the cornerstone of

the evolution and growth of Reliance. Starting with textiles

in the late seventies, Reliance pursued a strategy of

backward vertical integration - in polyester, fiber

intermediates, plastics, petrochemicals, petroleum refining

34

and oil and gas exploration and production - to be fully

integrated along the materials and energy value chain.

The Group's activities span exploration and production of oil

and gas, petroleum refining and marketing, petrochemicals

(polyester, fiber intermediates, plastics and chemicals),

textiles and retail.

Reliance enjoys global leadership in its businesses, being

the largest polyester yarn and fiber producer in the world

and among the top five to ten producers in the world in

major petrochemical products.

The Group exports products in excess of USD 7 billion to

more than 100 countries in the world. There are more than

25,000 employees on the rolls of Group Companies. Major

Group Companies are Reliance Industries Limited

(including main subsidiaries Reliance Petroleum Limited

and Reliance Retail Limited), Indian Petrochemicals

Corporation Limited and Reliance Industrial Infrastructure

Limited.

35

Mr. Mukesh Ambani

Chairman & Managing Director

Mr. Mukesh D. Ambani, age 49, is a Chemical Engineer

from the University of Bombay and pursued MBA from

Stanford University, USA. He is the son of Mr. Dhirubhai H.

Ambani, Founder Chairman of the Company

Mukesh Ambani is the chairman, managing director and the

largest shareholder of Reliance Industries, India's largest

private sector company and a Fortune 500 Company. His

personal stake in Reliance Industries is 48%. His wealth is

US$ 20.1 billion as of March 2007, making him the world's

14th richest person and the second richest person in India.

Mukesh and younger brother Anil are sons of the late

founder of Reliance Industries.

Mukesh Ambani joined Reliance in 1981 and initiated

Reliance's backward integration from textiles into polyester

fibres and further into petrochemicals. In this process, he

directed the creation of 60 new, world-class manufacturing

facilities involving diverse technologies that have raised

36

Reliance's manufacturing capacities from less than a million

tonnes to twelve million tonnes per year.

Mukesh Ambani is also steering Reliance's initiatives in a

world scale, offshore, deep water oil and gas exploration

and production program, a pan-India petroleum retail

network involving 5,800 outlets and a research-led life

sciences initiative covering medical, plant and industrial

biotechnology.

Mr. Mukesh D. Ambani joined Reliance in 1981 and

initiated Reliance's backward integration from textiles into

polyester fibers and further into petrochemicals. In this

process, he directed the creation of several new and large

world-class manufacturing facilities involving diverse

technologies that have raised Reliance's petrochemicals

manufacturing capacities from less than a million tones to

over thirteen million tones per year. He directed and led the

creation of the world's largest grassroots petroleum refinery

at Jamnagar, India, with a present capacity of 660,000

barrels per day (33 million tones per year) integrated with

petrochemicals, power generation and port and related

infrastructure. He had set up the Reliance's

communications technology initiative that is the largest and

most complex information and communications technology

initiative in the world.

Mr. Ambani is steering Reliance's initiatives in a world

scale, offshore and onshore oil and gas exploration and

37

production program, creation of a pan-India petroleum

retail network and setting up of a new export oriented

refinery through RIL's subsidiary Reliance Petroleum

Limited (RPL) with a capacity of approximately 580,000

barrels per stream day integrated with a 0.9 MMTPA

polypropylene plant.

Mr. Ambani's Achievements include:

Conferred 'ET Business Leader of the Year' Award by The

Economic Times (India) in the year 2006.

Had the distinction and honor of being the co-chair at the

World Economic Forum Annual Meeting 2006 in Davos,

Switzerland.

Ranked 42nd among the 'World's Most Respected Business

Leaders' and second among the four Indian CEOs featured

in a survey conducted by Pricewaterhouse Coopers and

published in Financial Times, London, November 2004.

Conferred the World Communication Award for the 'Most

Influential Person in Telecommunications in 2004' by Total

Telecom, October 2004.

Chosen 'Telecom Man of the Year 2004' by Voice and Data

magazine, September 2004.

Ranked 13th in Asia's Power 25 list of 'The Most Powerful

People in Business' published by Fortune magazine, August

2004. 30 Growth is Life

Conferred the 'Asia Society Leadership Award' by the Asia

Society, Washington D.C., USA, May 2004.

38

Ranked No.1 for the second consecutive year, in The Power

List 2004 published by India Today, March 2004.

Mr. Mukesh D. Ambani is the Chairman of Indian

Petrochemicals Corporation Limited, Reliance Petroleum

Limited and Reliance Retail Limited. He is member of the

Shareholders'/ Investors' Grievance Committee of the

Company.

Major Subsidiaries & Associates:-

The Reliance Industries Limited is the flagship company of

Reliance Group which has ownership interest in the

following subsidiaries & associates

Major Subsidiaries

Reliance Petroleum Limited

Reliance Netherlands BV (including Trevira)

Reliance Retail Limited

Ranger Farms Private Limited

Retail Concepts and Services Private Limited

Reliance Retail Insurance Broking Limited

Reliance Dairy Foods Limited

Reliance Retail Finance Limited

RESQ Limited

Reliance digital Retail Limited

Reliance Service Solutions Limited

Reliance Jamnagar Infrastructure Limited

39

Reliance Haryana SEZ Limited

Reliance Industrial Investment & Holdings Limited

Reliance Ventures Limited

Reliance Strategic Investments Limited

Reliance Exploration & Production - DMCC

Reliance Industries (Middle East) DMCC

Reliance Global Management Services (P) Limited

Reliance Commercial Associates Private Limited

RIL (Australia) Pty Limited

Major Associates

Indian Petrochemicals Corporation Limited

Reliance Industrial Infrastructure Limited

RELIANCE RETAIL LIMITED

Growth through Value Creation

Reliance is gearing up to revolutionize the retailing industry

in India. Towards this end, they are aggressively working on

introducing a pan-India network of retail outlets in multiple

formats. A world class shopping environment, state of art

technology, a seamless supply chain infrastructure, a host

of unique value-added services and above all, unmatched

customer experience, is what this initiative is all about.

The retail initiative of Reliance will be without a parallel in

size and spread and make India proud. Ensuring better

40

returns to Indian farmers and manufacturers and greater

value for the Indian consumer, both in quality and quantity,

will be an integral feature of this project. By creating value

at all levels they will actively endeavor to contribute to

India's growth.

The project will boast of a seamless supply chain

infrastructure, unprecedented even by world standards.

Through multiple formats and a wide range of categories,

Reliance is aiming to touch almost every Indian customer

and supplier.

The magnitude and strategy of RIL's retail foray is sure to

have far reaching social and economic implications by

directly influencing the lifestyles of hundreds of millions of

consumers, besides indirectly impacting the livelihood of

tens of millions. This indirect impact will be on those

engaged in a wide range of economic activities including

farming, consumer goods manufacturing, and a host of

myriad other services that bring hundreds of categories of

goods and services from the producers to the final

consumers.

Business analysts feel that Mukesh Ambani's advantage is

his huge financial strength coupled with a track record of

implementing mega projects in record time, at globally

competitive capital costs. Mukesh Ambani has learned to

dream big from his great visionary father, the late

Dhirubhai H Ambani, who is acknowledged as one of India's

41

tallest, most ambitious and successful business leaders for

his sharp business acumen and skilled people management

ability. If the announced retail project is any indication,

Mukesh Ambani has indeed inherited all these skills from

his father. Re-writing the rules of business has been

the forte of Dhirubhai and Mukesh is attempting the same

in retail.

Quite clearly, RIL is now all set and ready to conquer the

organized retail domain. The Indian retail scene is now

going to witness some real fast-paced action, with the

consumer – as always – having the best deal.

So, as they say, let the action begin!

Reliance Digital:Mukesh Ambani's Reliance Industries Ltd

launched a second group of retail stores called RELIANCE

DIGITAL which will sell consumer electronics and other

household appliances. Reliance Digital Store has been

launched five months after the company first introduced its

fresh food format outlets, Reliance Fresh, that stock its own

label of groceries under the brand, Reliance Staple.

The first of the stores was unveiled at the Shipra Mall at

Indirapuram in Ghaziabad on the outskirts of the national

capital

New Delhi April 24 Reliance Retail Ltd, the mega retail

venture from the Mukesh Ambani stable, marked its foray

42

into speciality retail with the launch of its first consumer

durable outlet, Reliance Digital, in the NCR region.

Reliance is planning to open a total of 150 Reliance Digital

stores across 70 cities with investment of Rs 1,000 crore

over the next three to four years

One-stop shops:The stores size approx 15,000-30,000 sq.

ft, will function as one-stop shops for all technological

solutions in the consume durables and IT

telecommunications segment to cater to the tastes and

requirement of customers.

Reliance Digital stores would sell everything from TV sets,

home theatres, refrigerators, cooking ranges, dishwashers

to computers and mobile phones from across brands. Each

store would be set up at an investment of Rs4 to Rs7 crore

and also provide after-sales services

On private labels, RELIANCE DIGITAL has on offer of more

than 4,000 products from over 150 brands. As part of their

overall business strategy they will have their own consumer

durable private labels, but not immediately. With its own

labels in the consumer durables segment, Reliance Retail

will be fighting for a share of the $5.6-billion domestic

market, which is dominated by South Korean brands LG and

Samsung and Japan's Sony.

The domestic consumer electronics market is growing by 10

per cent annually and is split between imported South

43

Korean brands such LG and Samsung and Japan’s Sony on

the one hand and Indian market leaders like Videocon and

BPL

The prices being offered at the Reliance Digital stores will

be most competitive and if any consumer finds a cheaper

product in the market within 30 days they will not hesitate

to match the offer.

Besides, the stores will also provide pre- and post sales

services through its in-house RelianceresQ vertical.

The stores will also offer finance schemes for consumers for

which the retail majors are in talks for tie-ups with several

financial institutions, Citi Financial being one of them.

Reliance Digital will also be offering customers Reliance

One, a common membership and loyalty Programme across

all its formats, which means users, would be able to redeem

points earned on purchases. Other formats of Reliance

Retail such as supermarkets and hypermarkets are soon to

launch.

Reliance Industries had last year announced an investment

of Rs 25,000 crore for the retail business, which it hopes

would help the company earn around Rs 100,000 crore

revenues in the next five years, 10-15 per cent of which will

be contributed through retailing of consumer durables at its

Reliance Digital stores and hypermarkets.

44

Industry estimates suggest India's retail market is worth

$320 billion, of which organized retail accounts for $7.5

billion and expected to grow to $21.5 billion by 2010.

Reliance Fresh

Reliance Industries launched its first retail format called

Reliance Fresh in Hyderabad. Spread over 2,000-5,000 sq

ft, 11 such Reliance Fresh neighborhood convenience stores

were come up in the city. These stores sell fresh fruit and

vegetables besides staples (dal, atta, rice) as well the

company’s in-house brand Reliance Select and Reliance

Value.

Reliance is gearing up to revolutionize the retailing industry

in India. Towards this end, we are aggressively working on

introducing a pan-India network of retail outlets in multiple

formats. A world class shopping environment, state of art

technology, a seamless supply chain infrastructure, a host

of unique value-added services and above all, unmatched

customer experience, is what this initiative is all about.

The retail initiative of Reliance will be without a parallel in

size and spread and make India proud. Ensuring better

returns to Indian farmers and manufacturers and greater

value for the Indian consumer, both in quality and quantity,

will be an integral feature of this project. By creating value

45

at all levels, we will actively endeavor to contribute to

India's growth.

The project will boast of a seamless supply chain

infrastructure, unprecedented even by world standards.

Through multiple formats and a wide range of categories,

Reliance is aiming to touch almost every Indian customer

and supplier.

The Fresh stores at Hyderabad are part of a pilot project,

which will help company understand customer needs. The

pilot for this format will be taken to many other cities over

the next few months. Next on the company’s list are bigger

cities including Delhi and Mumbai

RIL intends to invest close to Rs 25,000 crore over the next

five years in the retail business. The company plans to

establish 4,000 retail outlets across various formats by then,

and is eyeing sales of Rs 1,00,000 crore over the 5-year

period from the retail business.

Besides Reliance Fresh, the company also plans to launch

larger format stores called “Feel Fresh Plus” which will be

spread over 10,000-15,000 sq ft. The Fresh Plus stores will

stock fruit and vegetables as well as apparel, consumer

electronics, FMCG items and even medicines. From

Hyderabad, these stores will travel to Mumbai and Delhi

where Reliance has identified up to 80 locations each.

But even as the retail debut kicks off with fruit and

vegetables, it seems the company is doing a rethink on

46

whether to get into the larger formats such as hypermarkets

and supermarkets. These two formats require over 1 lakh sq

ft of space and may not come up at prime city locations.

Instead, Reliance is contemplating tapping alterative sites

such as the SEZs for opening hypermarket

The strategy is to open one Reliance Fresh store in a radius

of three to four km to serve 1,000-2,000 families. This

means about 30-40 stores in the major metros. Reliance

Fresh is selling vegetables and fruits sourced from farmers

through the company’s agri hubs.

Reliance Fresh would carry fresh fruits and vegetables,

staples, top-up grocery, non-food items and dairy products

and a whole lot of other categories at very competitive

prices. All the stores opened have an average area of about

1,800 sq ft and an average of about 20 sales associates

attending to customers in each store open from 8 a.m. to 10

p.m. on all seven days of the week.

A targeted sales turnover of Rs 90,000 crore (US$ 20

billion) by 2010 with a planned investment of Rs 30,000

crore over the next five years – that's the retail vision of

Mukesh Ambani and his RIL retail team. RIL's retail venture

seems all set to achieve the status of being the flag-bearer

of India Retail Inc, and that too in record time!

Culling information from all possible sources, Images F&R

Research attempts to put the Reliance Retail jigsaw in order

and see how the concept and strategy differentiates from

47

the existing competition, how it impacts the intermediaries

and consumers, and more interestingly, how will it stand up

to the real competition from global retail powerhouses like

Wal-Mart, Carrefour, Target, Metro, Sears and Tesco that

are eager to enter the Indian retail arena once the FDI

barrier is lifted. Read on for the full story…

It's been in the news for quite some time now. Earlier, about

a year ago, it was only whispered in close industry circles.

Slowly the whispers become louder, and the word gained

ground that India's largest private sector company, Reliance

Industries Limited (RIL), is entering the Indian retail sector

in a real big way.

But with virtually nothing coming from anyone in the know

inside RIL about their retail plans, this has to be one of the

most closely guarded secrets of India's corporate story.

Amidst all sorts of speculations in the media circles about

RIL's intended retail foray, the word finally came out on

January 23, 2006, when the Mukesh Ambani-controlled

Reliance Industries Limited presented the mega retail

initiative plans to its board of directors who subsequently

gave their consent to pursue the retail business through a

wholly-owned subsidiary of the company – likely to be

christened Reliance Retail Limited.

The Reliance Retail blueprint envisages nation-wide chains

of hypermarkets, supermarkets, discount stores,

department stores, convenience stores and specialty stores,

48

in about 800-odd cities and towns across the length and

breadth of India. The RIL board of directors approved the

initial phase of the retail foray at an estimated cost of Rs

3,350 crore (US$ 750 million).

That was big news for both the national and international

media, which went all agog again with intense speculation.

Giving full respect to the importance of this announcement,

more than one leading international daily – chiefly, The

Financial Times – gave this news a front-page treatment,

speculating (like many others) that this investment could

just be an initial tranche of a much larger commitment from

Reliance Industries towards the retail project.

Just how big and grand this investment is for the Indian

retail sector can be gauged by the simple fact that the

entire Indian retail sector is estimated to be at Rs 1050,000

crore (US$ 233 billion) – growing at five per cent annually –

and the estimated share of organised retail is only Rs

36,000 crore (US$ 8 billion), at present, albeit growing at

over 30 per cent every year.

That makes Reliance Retail's proposed investments

equivalent to about 10 per cent of India's organised retail

market – such a level of investment in the Indian retail

arena has been unprecedented in the country's most

promising sunrise industry – retail.

So much so, projections by the Images-KSA India Retail

Report 2005 of an organised retail market of Rs 100,000

49

crore (US$ 22 billion) by 2010 now appears conservative,

likely to be achieved much earlier than 2010.

If Indian retail was lacking a whole-hearted and full-blooded

thrust from a big and large corporate house (apart from the

lukewarm investments made by the Tatas and ITC), it is now

all set to change. Mukesh Ambani, who has been nourishing

retail ambitions for quite some time now, has clearly

positioned himself in to the role of redefining the entire

landscape of Indian retail.

RIL Set To Become World's Largest Real Estate Property

Owner

What is even more interesting is that Reliance Industries

Limited will far out-surpass the Catholic Church in

becoming the world's largest owner of real-estate property

by virtue of its mega Retail and Satellite Township plans, in

the next two to three years!

Now what exactly does this mega retail plan portend for the

Indian retail sector? In fact, what exactly are RIL's plans, in

terms of retail strategy? How will RIL differentiate its stores

and concept from existing players who have already moved

into the retail space earlier, and have already established a

good foothold? How will this impact the existing retail

majors – the likes of Pantaloon Retail, Trent India,

Shoppers' Stop, RPG, etc? How will the consumer benefit

from RIL's venture and how will intermediaries like traders,

50

suppliers and farmers all along the supply chain network

benefit? What will be the USP of Reliance Retail?

And, more significantly, how will this impact the major

international retailers who plan to enter the Indian retail

market? Reliance Retail is in fact giving India for the first

time a real feel of the scale at which these global retail

powerhouses actually operate, it is preparing India to stand

up to the ensuing competition and in the process, allow

consumers the full benefits of modern retail.

Retail Will Become Core Business of RIL

Reliance Industries Limited is the largest and one of the

fastest growing private sector companies in India, with

business activities encompassing almost all major growth

sectors of the Indian economy. The company manufactures

and markets a wide range of products with market

leadership in almost all its businesses.

All of Reliance Group production and services ventures have

one common feature – global scale operations employing

state-of-the-art technology in all fields. The company is truly

emerging as a well diversified conglomerate with global

competence in technology, management and financial

capabilities to meet the needs of a rapidly growing Indian

market.

With domestic market shares ranging from 40-80 per cent,

RIL is also ranked among the top 10 producers globally, for

51

all its major product segments. It is one of India's largest

business conglomerates with total revenues of Rs 1,00,650

crore (US$ 22.6 billion).

It is being speculated within the industry that the ROIs

made by RIL in the retail space will far out-shadow its

existing core flagship businesses – and very soon retail will

become the core business for the Mukesh Ambani-

controlled Reliance empire.

Future Planning:-

Company plans to have a pan-India presence by opening

stores in 784 cities and 600 small towns and achieve a

target of Rs.10 billion revenue by 2010 by which time it

hopes to complete Phase 1. In the first phase company plans

to employ 500,000 people. It is following an all-inclusive

model giving the right affordability across all income

groups. Company is aggressively partnering farmers by

following a farm-to-fork strategy in its supply chain

management model and ensures that it delivers fresh fruits

and vegetables at affordable prices to consumers. Currently,

Reliance Fresh has over 100 stores across the country.

Reliance Fresh also offers a membership and loyalty

programme - Reliance One - to deliver customized benefits

52

to frequent shoppers. Currently, it has 200,000 loyalty

customers across Hyderabad, Jaipur and Chennai.

Reliance Retail, the 100% subsidiary of Reliance Industries,

on October 28 unveiled Reliance Fresh, the first of its multi-

format retail foray involving an investment of Rs 25,000

crore.

Reliance Fresh is the company’s brand for neighborhood

fresh-food outlets. It will also sell kitchen equipment and

other edibles.

Besides, it has planned hypermarkets, supermarkets,

discount stores, department stores, convenience stores and

specialty stores, to be unveiled shortly.

The Reliance Fresh supermarket chain is RIL’s Rs 25,000

crore venture and it plans to add more stores across

different geographies, and eventually have a pan-India

footprint by year 2011.

The super marts will sell fresh fruits and vegetables,

staples, groceries, fresh juice bars and dairy products and

also will sport a separate enclosure and supply-chain for

non-vegetarian products.

Currently, selling through company-owned stores currently

totals just $8 billion in India. Industry estimates say that the

country’s retail industry is worth $300 billion, that is about

Rs 13, 50,000 crore. This stands a chance to blossom to

$427 billion in the next four years. Organized retail

53

accounts for just over Rs 35,000 crore. Reliance Fresh bids

to tap the potential for organized retail in the country.

Point of Sale Software System

Retalix StoreLine is an open-standards, fully integrated and

cross-functional Point of Sale (POS) and store management

software system. Its uniqueness is in the functionality,

world-wide install base, and hardware independence.

Multi-Concept Functionality that delivers a fully integrated

POS solution to meet all of your business needs

Open by Design supports industry standards and is

hardware independent plus integration with other third-

party retail applications is straightforward, affordable and

low risk

Advanced Promotion Features enable a single point of

update for pricing and promotions across all retail formats

Graphical, Easy to Use flexible intuitive user interface,

touch-screen capabilities and even graphical customer

screens, means that cashier training is minimal and

customer interaction is effortless

Quick Service Deli, provides a powerful method of

managing fresh-made sandwiches and deli items

Fuel provides full support for operating an onsite fuel

station, supporting a full range of fuel station and

supermarket services

54

Retalix BackOffice is tightly integrated with Retalix

StoreLine, and offers POS item management and reporting,

DSD receiving, label and sign printing, handheld RF

communications, host communications and in-store ordering

Retalix PocketOffice is a mobile platform that enables users

to manage store operations anywhere in the store, taking

the application to the business decision point, while on the

sales floor or receiving dock.

Retalix StoreLine is installed in more than 250,000 POS

terminals worldwide, and is the selected POS solution of

top-tier retailers such as Tesco, Publix, Sainsbury's,

Woolworths Australia, Delhaize Group, Hy-Vee, and the A.S.

Watson Group.

Supply Chain Management

A supply chain is a network of facilities and distribution

options that performs the functions of procurement of

materials, transformation of these materials into

intermediate and finished products, and the distribution of

these finished products to customers. Supply chains exist in

both service and manufacturing organizations, although the

complexity of the chain may vary greatly from industry to

industry and firm to firm.

55

From the above pictorial representation of supply chain

management of reliance fresh it is clear that raw material is

procured from vendors, transformed into finished goods in a

single step, and then transported to distribution centers,

and ultimately, customers. Realistic supply chains have

multiple end products with shared components, facilities

and capacities. The flow of materials is not always along an

arborescent network, various modes of transportation may

be considered, and the bill of materials for the end items

may be both deep and large.

2.2 Reliance Fresh Loyalty Programme

1. What is Loyalty Membership?

FarmersCollection center

Distribution centerReliance Fresh

56

Loyalty Membership is a program devised by Reliance Industries Limited for Reliance Fresh to retain the customers visiting their stores. It is a program by which Reliance Fresh store issues a Loyalty Membership Card to its customers to encourage them to shop at the store regularly. Each time they buy something they collect points which will allow them to redeem cash vouchers to shop at store in future. Followings are the features of the program:

An electronic method of identifying customer purchases and translating that information to reward customers based on their shopping habits.

There is a reward point system by which customers receive reward points on every purchase made at the store.

For every purchase of Hundred Rupees customer will receive One reward point.

Customer should accumulate minimum of 25 points to get a reward voucher by which he can make purchase at the store equivalent to Rupees 25.

Customers can also retain these points and receive reward voucher whenever they want.

Members will also receive accidental insurance of Rupees 50,000 under this program.

Customer will be issued a permanent membership card after 180 days

of issuing of temporary card.

2. How Loyalty Membership Program benefit

Retailers?

57

The program data help retailers to adjust their product assortment to customer demands.

Retailers remove or cut back slow-moving items and devote more shelf space to the products that program members buy.

Identify their most loyal customers.

Learn more about their best customers buying habits.

Offer the products and services according to their best customers demand.

3. How do Loyalty-Membership Program works?

To enroll, customers typically complete an application form asking for their Name, address, gender, phone number, e-mail address, income etc.

Each time cardholders make a purchase, the store scans their membership card, tracks the sale and converts this data into useful information.

Loyalty Membership programs give customers points that accrue with their purchases and can be redeemed for rewards.

Cardholders receive their discounts by presenting their card at the checkout or by redeeming targeted coupons.

4. How can food retailers help consumers and Manage Operations with the data they collect?

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Analyze shopping habits, refine marketing programs and fine-tune the product mix at the chain or individual store level.

Stores use data gleaned from loyalty-marketing programs to:

Identify the promotions that appeal most to various customer groups, e.g., discounts or rebates for price-conscious shoppers; home delivery services for busy shoppers.

Reduce the shelf space devoted to slow-moving items in order to stock the products that customers prefer.

Reveal when products were sold and whether they were sold on or off promotion, and the profit margin on each sale.

Improve speed-to-shelf and decrease out-of-stocks.

Determine how product deletions affect their best customers, and take steps to keep those customers from taking their business elsewhere.

5. What are the advantages of this Loyalty Program for customers?

Following are the advantages of Loyalty Program:

Loyalty Program gives customers the sense that the retailer values them personally and respects them.

This program has an inbuilt system of giving discount over the competitive prices of the goods, if compared from general retailers.

Besides this it also offers an accidental insurance of rupees 50,000.6. How we can make Loyalty Program more effective?

We can make it effective by introducing various types of schemes which can attract customers.

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We can issue prepaid cards in different denominations to our customers and provide additional discounts and offers in addition to our normal reward point system.

We can also categories the cards as Platinum, Gold and Silver based on purchasing capacity/trend of different segments of customers. The advantages can be increased with the upgraded membership.

Card can be made attractive by issuing a plastic or a laminated card in place of the present paper card so that it can be retained for a long time.

Increase level of personalized service/interactive approach with the customers. Through interaction and personalize service the front line staff should ensure to make the customers feel that they are the valued clients.

Cashier should request and enlighten the customers to use their cards.

Regular announcement should be made to encourage customers to use their loyalty cards to redeem reward points.

There can be additional rewards depending on the frequency of usage of card or can be based on their visit to the store.

The Loyalty Program form can be bilingual and should be of one page so that customers find it easy to fill.

The form at present is very lengthy and it becomes irritating for the customer when too much information is being asked. Therefore, it is suggested that the form should be made simple and some irrelevant questions, if any, may be removed.

If need be in order to facilitate the customers, a separate person may be assigned the task for filling up the forms.

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Customers need instant answers to their queries. So store staff can be trained about this Loyalty Program so that they can also assist customers.

The FDM should ensure optimum utilization of available manpower.

7. Can Loyalty be bought?

Yes, it can be bought by winning the faithfulness of the customers by giving them quality services without interruption. Meeting the changing expectations of the customers will help strengthen a lasting relationship and ensure that the customers no longer feel like going elsewhere.

8. What is the percentage of customers using Loyalty Cards?

On an average every Reliance Fresh is issuing 80-120 loyalty cards per day.

The ratio of customers using this card floats between 50%-60%.

Educated people are giving more attention to the loyalty card.

9. How many customers are having more then one card? Why?

Customers are not able to retain existing paper card for a long time so customers can be issued a new card with the same number if the exiting card cannot be scanned by machine properly.

10% cards cannot be scanned as these are paper cards and get distorted.

10. How we can build our product awareness?

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The advantages of a customer card must be actively conveyed from the management to the customer via the staff.

We can utilize the time of customers by making them aware about the reward program when they are waiting for billing.

Regular announcements can be made by the MSR’s regarding the benefits of the Loyalty Card and asking customers to use the benefits of the program.

Clippings about the product may be flashed through the electronic media.

Details of the Loyalty Program may also be circulated through pamphlets in newspapers.

11. What are the problems being faced by customers? How we can work on it?

Token system should be introduced, as yet customers are facing problems as their belongings are not safe outside the store.

Customers have to wait for a long time for billing so we can introduce a system of separate queues for ladies and senior citizens and can also increase number of cash counters.

Customer is coming in Reliance Fresh due to a brand name and thinking its product would be of good quality, but sometimes there are rotten fruits and vegetables with the bunch of fresh ones this leads to a wrong impression on customers. So, there should be proper sorting to maintain the consistency in there quality.

Proper availability of stock should be maintained to cater to the needs of customers.

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Sometimes store staff are ignorant and don’t pay much attention to customers and this frustrates the customers. So store staff should be trained to assist the customers in a proper way.

Facility of drinking water should be provided at the store which is not available at present

. Toilets for customers should be made available.

There should be counting of items purchased by a customer at the billing point to prevent misplacement.

12. How to increase efficiency of employees?

Providing refreshments like tea, coffee at least in two intervals so that the employees feel energetic and work more efficiently.

Orientation program can be conducted for the employees to make them aware of the targets to be achieved.

The employees should be kept in high state of morale. This could be achieved by the effective leadership.

Career progression of the employees should be chalked out.

2.3 RELIANCEONE MEMBERSHIP CARD

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This is a card which was given to the customer at free of

cost. This card helps to increase the loyalty sales

percentage of the store. Benefits of this card are:

Customer will get 1% point of his purchasing amount added

to his\her membership card.

When these points will become 25, it means that 25 points

is equivalent to 25/-. He\she will be able to redeem his\her

points & get a discount of 25/-

With this card customer will get “Accidental Death

Insurance” of 50000/- by default.

If customer will recharge their Hutch, Reliance, Airtel &

Idea mobile from CSD then also 15 point of the amount he

recharge will be added to his card.

In starting customer will get temporary card, which is valid

for 180 days. Within 180 days customer will get permanent

card, which is look like plastic card at postal address given

by the customer in the form for issuing of RelianceOne

Membership Card. Conditions for eligibility of permanent

card are as follows:

Customers have to do a purchasing of 1500/- with the help

of card within 3 months from the issuing date OR he have to

scan his card at least 10 times.

If above criteria is not fulfill then in next 2 months

customers have to do a purchasing of 600/- with the help of

card OR he have to scan his card at least 6 times.

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CUSTOMER INFORMATION CHANGE REQUEST

If customer wants to change his Postal address, Telephone

Number or Email ID then customer have to fill the

“Customer Information Change request”.

Process to be followed for change of Customer

Information

Take a printout of the Customer Information Change

Request form.

The customer has fill up all the required details mentioning

his RelianceOne Membership card number.

The customer has to sign the request form and hand it over

to the MSR.

The MSR checks for the following on the form

RelianceOne membership number

First Name

Last Name

Information regarding change request

Date

Customer Signature

The MSR then fills up the information in the “FOR OFFICE

USE” space.

The format for request ID is store code- date in DDMYY-

serial number stating from 0001.

The MSR fills up the MSR code and signs in the space

provided.

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This entire request should be filled separately and kept at

the store under lock and key.

Once the system for making these changes is live, all these

forms have to be sent to the data entry center for the

processing. The data for dispatch will be notified later.

The format of Customer Change Request Form is:

Customer Information Change request

Please incorporate the following changes in my RelianceOne

membership details

(Please tick the appropriate box)

The format of Customer Change Request Form is:

Customer Information Change request

Please incorporate the following changes in my RelianceOne membership details

(Please tick the appropriate box)

RelianceOne Membership No.

First Name

Last Name

I have moved to a new house. Please send all communication to my new address given below

Address Line 1*

Address Line 2

Landmark

City\ Taluka*

Pincode*

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My Phone Number has changed

Std Code Phone (Res)Mobile

Std Code Phone (Off) I have a new email address

Email

Date D D M M Y Y Y Y Signature

FOR OFFICE USE ONLYStore Code

Request ID: CIC - D D M M Y Y - Store code Date Serial No

MSR Code

MSR Signature

Replacement Card Request

If the card of the customer is damaged or lost then he has to

fill a “Application Form for Request for Replacement Card”.

Process to be followed for Request for Replacement

Card

1. Take a printout of the Application form for request for

Replacement Card.

2. The customer has fill up all the required details

mentioning his RelianceOne Membership card number,

first name and last name.

3. The MSR has to handover the new temporary card to

the customer and fill up the new card number in the

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space provided. The MSR has to destroy the

corresponding application form by tearing it.

4. The customer has to sign the request form and hand it

over to the MSR.

5. The MSR checks for the following on the form

a. RelianceOne membership number

b. First Name

c. Last Name

d. If the card is damaged, the MSR has to collect the

damaged card and tick the appropriate option on

the application form. If the card is lost, then the

appropriate option is ticked.

e. Date

f. Customer Signature

6. The MSR has to inform the customer that he\she will

not be able to earn points using the old card since it

will be deactivated.

7. The MSR should inform the customer that he\she

would be able to use the new card with immediate

effect. However, the customer can start redeeming

only after a period of 21 working days, which are

required for processing the replacement request.

8. The MSR then fills up the information in the “FOR

OFFICE USE” space.

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9. The format for request ID is store code- date in

DDMYY- serial number stating from 0001.

10. The MSR fills up the MSR code and signs in the

space provided.

11. All these damaged cards and application for

replacement cards should be filled separately and kept

at store under lock and key.

12. Once the system for making these changes is live,

all these forms have to be sent to the data entry center

for the processing. The data for dispatch will be

notified later.

The format of Application Form for Request for

Replacement Card is:

Application Form for Request for Replacement Card

RelianceOne Membership No.

First Name

Last Name

This is to inform you that my RelianceOne membership card is lost/ damaged. I have been issued a replacement card with card number

I request you to deactivate my old card and transfer all the points to my new card number mentioned above. I understand that I would not earn any points on usage of my old card.

I declare that I have surrendered the damaged card at the customer service desk

I declare that I will destroy the lost card if found.

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Date D D M M Y Y Y Y Signature

FOR OFFICE USE ONLYStore Code

Request ID: RRC - D D M M Y Y - Store code Date Serial No

MSR Code

MSR Signature

CHAPTER- 3 UNDERSTANDING

PLANOGRAM

A planogram is a diagram of fixtures and products that

illustrates how and where retail products should be

displayed, usually on a store shelf in order to increase

customer purchases. It is an arrangement of different

products in the most appropriate order with optimum

utilization of available space. It also shows the exact

quantity of each product in the store as well as its position

on a particular bay & shelf.

They may also be referred to as plannograms, plano's,

plano-grams, plan-o-grams, schematics (archaic) or POGs. A

planogram is often received before a product reaches a

store, and is useful when a retailer wants multiple store

displays to have the same look and feel. Often a consumer

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packaged goods manufacturer will release a new suggested

planogram with their new product, to show how it relates to

existing products in said category.

Planograms differ significantly by retail sector. Fast-moving

consumer goods organizations and supermarkets largely

use text and box based planograms that optimize shelf

space, inventory turns, and profit margins. Apparel brands

and retailers are more focused on presentation and use

pictorial planograms that illustrate "the look" and also

identify each product.

Since the purpose of a planogram is to communicate how to

set the merchandise to increase customer purchases, much

research often goes into the layout of a planogram.

Attention is given to adjusting the visibility, appearance and

presence of products to make them look more desirable, or

to ensure sufficient inventory levels on the shelf or display.

There are some consulting firms which specilize in retail

space layout and planogramming. Some chain stores and

wholesalers also create and maintain planograms for their

stores.

Planogramming is a skill developed in the fields of

merchandising and retail space planning. A person with this

skill can be referred to as a planogrammer.

Scope

To study and re-engineer the existing Planogram.

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Purpose

• To communicate how to set the merchandise.

• To increase customer purchases.

• To adjusting the visibility, appearance and presence of

products

• To make them look more desirable.

• To ensure sufficient inventory levels on the shelf or

display.

• To use space effectively whether floor, page or virtual.

• To optimize short- and long-term returns on investment

into retail space.

• To provide a logical, convenient and inspiring product-

customer interface.

• To make right selection of products available.

• To facilitate communication of retailer’s brand identity.

• To maximize profit per centimeter of shelf space.

• Understand the relationship between space, sales and

profit

Merchandising

Merchandising refers to the methods, practices and

operations conducted to promote and sustain certain

categories of commercial activity.

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Visual Merchandising (VM) is the art of presentation, which

puts the merchandise in focus.  It educates the customers,

creates desire and finally augments the selling process.

Visual Merchandising helps in:

Educating the customers about the product/service in

an effective and creative way.

Establishing a creative medium to present

merchandise in 3D environment, thereby enabling long

lasting impact and recall value.

Setting the company apart in an exclusive position.

Establishing linkage between fashion, product design

and marketing by keeping the product in prime focus.

Combining the creative, technical and operational

aspects of a product and the business.

Drawing the attention of the customer to enable him to

take purchase decision within shortest possible time,

and thus augmenting the selling process.

PROCEDURE OF REPLENISHMENT OF STOCK

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The whole system of RELIANCE FRESH is connected

through an ERP SOFTWARE i.e. SAP and the replenishment

procedure is based on auto indenting & manual indenting.

Auto Indenting

MBQ of each SKU is already stored in the system of

DISTRIBUTION CENTRE. (D.C. is the place from where the

required quantity of stock is sent to the respective stores.)

As & when sales of a particular SKU takes place it is

automatically recorded in the system.

Within 3 days D.C. dispatches the required quantity of each

SKU to the store, to maintain the MBQ level of each shelf.

Manual Indenting

Before closing the store daily CSA of each category identify

the requirement of each SKU and communicate it to

supervisor and finally it is feed to SAP or mailed to

Distribution Centre (D.C.) to maintain the required level of

inventory.

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CHAPTER- 4 RESEARCH METHODOLOGY

Step 1: Per day sales of each SKU was obtained. The

SKUs list of Reliance Fresh which contains approximately

6000 SKUs/products of all different categories (Fruits &

Vegetables, Staples, Process Food, Non-Food Fast Moving

Consumer Goods, House wares, Beverages, Dairy, Backery,

Frozen, etc.) is provided by the head office. With the help of

this list, at store, daily sales of each SKU was obtained from

CSAs by interviewing them in depth. The probable demand

of those SKUs which were not in the Planogram of the store

were also obtained so that these could also be introduced if

found appropriate.

Step 2: Per day sales was then multiplied by 3 so as to

maintain the required stock level for 3 days. After

getting the daily sales of each SKU, it was then multiplied

by 3. Since, the supply of SKUs other than Fruits &

vegetables and Dairy from Distribution Center is made after

every 3 days and in order to maintain the required MBQ

level the sales figure is multiplied by 3.

For example, the daily sales of Parle

Krackjack 75-gram biscuit were 5 units approximately

told by the CSA. This projection of MBQ level was totally

based on the judgments of CSAs and on the previous

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month’s sales report. Therefore, its required MBQ level

should be 5x3, i.e., 15 units in the store. This approach was

applied for all SKUs of each category in order to adjust the

MBQ level of all SKUs of Planogram.

Step 3: Figure obtained in step 2 was then compared

with MBQ figure of current planogram for each SKU.

The figure so obtained for all the SKUs, by applying the

same approach, was then compared with the actual MBQ

level of respective SKUs in the Planogram. By this

comparison the difference between actual and obtained

MBQ level was found. This difference was then used to

adjust the MBQ level.

For example, the MBQ level as per current

Planogram of FORTUNE SOYA OIL 1 LT POLY PACK was 56

units but actual per day sales of this were 32 units,

therefore, according to this sales figure MBQ level should

be 96 units. But this figure is more then actual MBQ level,

therefore, its MBQ level was increased to 96 units by

providing it single facing and double vertical stacking.

Step 4: MBQ level of each SKU was adjusted by either

increasing or decreasing its quantity. Similarly the MBQ

level of each SKU was adjusted by either increasing or

decreasing its quantity which was required for the optimum

utilization of available bay space and better inventory

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management. This approach helped in better visibility of the

SKUs and raising the profitability of the store. This step

resulted in the empty spaces on the different bays.

Step 5: Empty spaces obtained because of step 4 was

then filled by new SKU which was obtained in

consultation with CSAs, FDM, Franchisee Manager, on

the basis of our judgment & based on feedback from

store staff . After getting the empty shelves, those SKUs

were finalized in consultation with CSAs, FDM, and

Franchisee manager and on the basis of our own judgments,

which were mostly demanded by customers other than

those SKUs which were available in the store. This helped

in introducing some new SKUs in Planogram.

Methodology Used

For re-engineering Planogram, following research was

done:

1. Research Design

Research Design is the overall plan to conduct research. It

covers:

data collection methods

sampling decisions

data analysis methods

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Often constraints on resources limit research design so

that it is less ideal.

For e.g. smaller sample size. The purpose of research

design is to decide approach that answers our problem in

best way, given constraints on resources.

Types of Research Design

There are three types of research designs:

1. Exploratory research design

Used for discovering ideas and insights

2. Descriptive research design – longitudinal and cross-

sectional

Used for describing characteristics of population

3. Causal research design

Used for proving cause-effect relationship

The research design used in re-engineering Planogram is

Exploratory Research.

2. Exploratory Research

Following designs (methods) are used for exploratory

research:

I. Secondary data

II. Focus groups

III. Depth interviews

Projective techniques: It consists of following techniques

I. Word Association

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II. Sentence completion

III. Third person & Role playing

IV. Thematic Apperception Test

The tool used for research required in re-engineering

Planogram is Depth interview.

3. Depth Interview

Principle of Depth Interview

Respondent will reveal truth about sensitive issue after

taking him in

confidence.

Respondent’s answer will be obtained by probing

Characteristics of Depth Interview

An unstructured interview of the respondent is taken

Only one respondent is interviewed at a time

Usually conducted by experienced researcher

Interviewer’s role is extremely important since the

emphasis is on probing

For re-engineering Planogram, the respondents

selected were CSAs, store supervisors, FDM,

Franchisee manager & customers.

Collection of Data

Secondary Data

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Secondary data is the data gathered by someone else prior

to the current needs of the researcher. It is already

available to the researcher before he starts conducting his

research work.

Advantages of secondary data

Quickly available

Economical

Dependable

Easy to Use

Accessible

Understandable

While conducting study for re-engineering Planogram, the

secondary data was collected as follows:

Analyse the following data from Management

Information Systems (MIS)

Current Plano gram

Category vise Net Sales

SKU vise Net Sales

Category vise unit sales

SKU vise unit sales

Maximum Bin/Bay Quantity (MBQ)

Primary Data

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The researcher originates the primary data. The primary

data for re-engineering Planogram was collected as follows:

Feedback from

CSA

FDM

Franchisee

Customer (limited to people known)

Customer demographics

Feed Back Questions asked from CSAs

1. Which SKUs have the maximum queries?

2. Which SKUs have maximum complains?

3. Which SKUs customers are happy with?

4. Are there any SKUs that you suggest as a

substitute?

a.) For what SKUs?

b.) What is the substitute?

5. Do you receive any queries for any SKUs which

are not stocked?

6. How much does each SKU is being sold on daily

basis?

7. Is the customer satisfied with the quality of

products available in the store?

8. Is the customer happy with the pack size available

(especially for

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staples, ghee & vegetable oil) or they need big or

small one?

Feedback received from CSAs

Maximum demand is for Fruits & Vegetables

(F&V) category.

Customers are happy with F&V and Process Food

(P.F.) but for P.F. introduce some more products.

Substitute suggested is mainly for staples and

P.F. category. For example:- Customer demanded

a particular brand of atta but sometimes due to

unavailability of stock, atta of other brand was

offered.

Customers query more about NF FMCG &

toiletries (Currently this category of SKUs is not

available in the store.)

Sometimes customers complain about the

freshness of F&V as they find it rotten and also

fresh ones mixed with rotten ones.

Some customer also asks for smaller pack size for

staple SKUs.

All the findings were communicated to

Franchisee Manager for which necessary steps

were taken.

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Strengths

• Brand Name

• Strong Financial Backup

• Good employee base

• Easily Reachable

• First Mover advantage

Opportunities•Potential Market

Weaknesses

• More time in billing

• Fruits & Vegetables are not always fresh

• Offer’s announcements are not proper

Threats

•Local retailers

•Opposition by Govt.

•Big retailers are entering

SWOT ANALYSIS

CHAPTER- 5 DATA ANALYSIS AND

FINDINGS

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There was a questioner, which was filled by me from the

customer to know the feedback of the customer about the

“Cut Fruits & Vegetables” which was put in the chiller

section of the store.

The format of questioner is as follows:

QUESTIONNAIRE

Name:___________________________________________

1. Quality of Fruits & Vegetables Of Reliance Fresh

a. Excellent b. Good c. Average d. Poor

2. If the answer of question no. 1 is C or D then name the

Fruits &

Vegetables which is not satisfying you.

______________________________________________

______________________________________________

3. Are you getting all the products, which you want?

a. Yes b. Almost c. No

4. Whether we are fulfilling your requirement timely.

a. Always b. Not Every time c. No

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5. If the answer of question no. 4 is B or C then why you are

not

getting the product at right time.

a. Not available in the store b. Bad quality c. Price

d. A.O.

6. Are you consuming our packed Fruits & Vegetable?

a. Regular b. Not regular c. No

7. If the answer of question no. 6 is C then why you are not

buying.

a. Quality b. Price c. Not Attractive

8. If in future Reliance Fresh gives you more cut Fruits &

Vegetables

then you will purchase it.

a. Yes b. Not sure c. No

9. If the answer of question no. 8 is A or B then at which

price you

will like to buy 250 grams of food

a. 10-15 b. 15-20 c. 20-25

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Findings of the questionnaire

Quality of Fruits & Vegetables Of Reliance Fresh

86

Are you getting all the products, which you want?

87

Are you consuming our packed Fruits & Vegetable?

88

Why you are not buying cut F & V?

89

The result of the survey is that, any of the customers

no like to buy cut F & V from Reliance Fresh. Major

reasons for this are Quality, Indian Culture & Price.

Lack of professionalism in the behavior of CSAs.

Customers are not aware with the benefits of the card.

Customer forgets their card at home.

Customer has no time.

MSR not asking for the cards major of the time.

No one is there who give card number from

Membership Master Dump.

Time taken in recharging.

Rigid ness to follow planogram in spite of non-

availability of SKUs.

Place for Mobile counter is not proper.

Dummy of some mobile handsets were not available.

Required SKUs were not available in the store, as

these SKUs were not sending by the D.C. instead of

repeated demand by the store.

Customers feel inconvenience to purchase wheat

without seeing & touching its sample.

Store becomes too congested during peak hours.

Many a times fresh F&V are mixed with rotten ones.

Non-availability of NF FMCG (Toiletries etc.).

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Consistency in quality in case of F&V is not

maintained.

Planogram of F&V changes as per its supply & sorting,

therefore, its planogram changes frequently.

Planogram of staple, P.F., beverages, dairy etc. exits

for longer duration, therefore, these are emphasized.

Some items were not available in the store given in

planogram.

Sorting of F&V was not done at right time.

Customers` feel inconvenience to purchase wheat

without seeing & touching it’s sample.

Non-Planogram SKUs were continuously sent by the

D.C. to store.

Required SKUs were not available in the store as these

SKUs were not send by the D.C. instead of repeated

demand by the store.

The problem of storage space was solved in time,

which helped in effective inventory management.

The store has ample but unorganized parking space.

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There are possibilities of introducing NF FMCG &

toiletries in the store as customer frequently ask about

these and required space for these can also be

created.Category contribution to total sales

92

Category contribution to gross marginCHAPTER- 6

CONCLUSIONSAND

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SUGGESTIONSConclusions –There is always a gap analysis between Retailer & customer.

Customers are ready to buy even at same rate or more

than as compared to outside if we provide them a

quality.

Customer has no time. They don’t want to waste their

time in selecting good vegetables.

By analyzing the primary and secondary data it was

identified that majority of sales is from F&V category

instead of mandi near to store only in the case when

quality is good. While for other categories some

changes like introducing more variety and keeping

competitive prices can be done to increase their sales.

Data gathered through sales report and CSAs were

analyzed to adjust the MBQ level of each SKU and to

increase the store profit.

Reliance Fresh needs to adjust its Planogram

according to the tastes and preferences of customer.

Since store does not offer NF FMCG and toiletries

most of the customers are switching to other players.

SUGGESTIONS –

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Announcement for the Membership card should be

there.

Effective utilization of storage space is possible.

Rigidity in following planogram should be avoided.

Possibility of Non-Food FMCG

Effective utilization of empty Shelves

Consistency in quality should be maintained.

Proper training should be imparted to CSAs.

Effective utilization of space should be done.

Mark down of SKUs especially for Fruits & Vegetables

should be done at proper time.

Sample of wheat and other staple items can be kept for

better exposure.

Consistency in quality should be maintained

Proper training should be imparted to CSA’s

Effective utilization of space should be done

Mark down of SKU’s, especially for Fruits & Vegetable

should

be done at proper time.

Sample of wheat & other staples items can be kept for

better exposure Fine Line Product Differentiation of

SKUs should be done.

Announcement for the Membership card should be

there.

Effective utilization of storage space is possible.

Rigidity in following planogram should be avoided.

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Possibility of Non-Food FMCG

ANNEXURES

1. Quality of Fruits & Vegetables Of Reliance Fresh

a. Excellent b. Good c. Average d. Poor

2. If the answer of question no. 1 is C or D then name the

Fruits &

Vegetables which is not satisfying you.

______________________________________________

______________________________________________

3. Are you getting all the products, which you want?

a. Yes b. Almost c. No

4. Whether we are fulfilling your requirement timely.

a. Always b. Not Every time c. No

5. If the answer of question no. 4 is B or C then why you are

not

getting the product at right time.

a. Not available in the store b. Bad quality c. Price

d. A.O.

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6. Are you consuming our packed Fruits & Vegetable?

a. Regular b. Not regular c. No

7. If the answer of question no. 6 is C then why you are not

buying.

a. Quality b. Price c. Not Attractive

8. If in future Reliance Fresh gives you more cut Fruits &

Vegetables

then you will purchase it.

a. Yes b. Not sure c. No

9. If the answer of question no. 8 is A or B then at which

price you

will like to buy 250 grams of food

a. 10-15 b. 15-20 c. 20-25

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BIBLIOGRAPHY

1) Kotler Philip,” Marketing Management”, New Delhi, Pearson Education Inc, 2006.

2) Kothari,C.R,Research Methodology methods and techniques, New Delhi, New Age International (p) Ltd,1990.

3)Copy of current Planogram4) List of SKUs

5)Websites:

- www.ril.com- www.businessworldindia.com- www.ORG-GFK.com- www.india-reports.com- www.wikipedia.org- www.economictimes.indiatimes.com

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